There's a multi-million pound bidding war brewing on the High Street

Home Retail Group, the owner of Homebase and Argos, is being
courted by two potential suitors — Sainsbury's and Australian
retailer Wesfarmers.

Sainsbury's confirmed last week it had made a bid for Home Retail
Group and late on Wednesday Home Retail Group announced in an
emailed statement that it is in "advanced discussions" with
Wesfarmers to sell Homebase for £340 million ($489.8 million),
confirming a Sky News story.

Quite what Sainsbury's make of the Wesfarmers news is unclear as
we're yet to see a statement from them. The supermarket seemed
keener on Argos than Homebase, so we could well see a fresh bid
for the slimmed down Home Retail Group after the Homebase sale is
out of the way.

Independent retail analyst Nick Bubb says in an email sent
Thursday:

It remains to be seen how that will affect Sainsbury’s numbers on
a bid, as the Argos concessions inside Homebase will have to go,
but Sainsbury's [sic] are clearly interested only in Argos and
they must be assuming that their own buying scale in furnishings
etc. can replace Homebase’s.

Argos sales up 0.9%, but same-store sales (stripping out
gains from opening new places) down 2.2%;

Homebase sales down by 4%, while same-store sales up 5%. The
slump is mainly down to store closures;

Group profits for the year ending February set to be "around
the bottom of the current range of market expectations of £92
million to £118 million."

Home Retail Group's management are clearly backing Wesfarmers in
the takeover bun fight, with CEO John Walden saying in today's
statement:

The potential transaction would allow the Group to focus on Argos
and its Transformation Plan, with an improved balance sheet and
financial position, which I believe would represent an even
greater opportunity for building long-term shareholder value.

Despite the disappointing profit forecast and unspectacular
sales, Home Retail shares are up over 3% this morning thanks to
the takeover and deal chatter.Investing.com